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Australia Futures indicate +5pts but pre market Flash PMI data missed forecasts and dropped more MoM than expects so the open may be muted BUT whilst oil was down small overnight the after market API report saw a bigger fall than expected. Gold names weak but resources +VE Tech still +VE following the US.
Flash PMI’s out and missed, later a speech from RBA’s Ellis.
Japan Nikkei futures opened +30pts Chicago Futures +25pts; expect a muted open following Tuesday’s strong rebound. Tech remains +VE
S Korea Expect markets to higher following the rebound in Tech in the US
Taiwan Market to open slightly higher. More heavy rain +VE for sentiment in alleviating water shortages.
China Expect market to open higher following the US but sentiment weak on credit and debt issues.
HK ADR’s +82pts at 28,391 with Financials weak, expect Petrochems to be strong after the US API report. Expect some initial margin call selling. Evergrande in focus over its financial state.
Opened flat Dow +28pts, S&P flat and NDX +0.1%
DOW +0.2%, NDX +0.79%, S&P +0.51%, Russel 2K +0.43%
Markets opened flat and worked higher for most of the day but closed just off the day highs. Nasdaq hits a new high. Powells testimony in focus. Bitcoin saw initial weakness dropping below $30k at one point but rebounded. Tech rallied even Alphabet despite news of a EU commission probe into whether its advertising unit abused its position.
Powell’s comments, released Monday evening; supported the notion that the Fed is ready to soon start discussing removing some of its unprecedented stimulus measures enacted during the pandemic. He was positive on the recovery and maintained the view that inflationary signs were just transitory and woould settle back to 2% over the long term; supporting the view the at the Fed will delay raising rates +VE for tech.
Blackrock buying Home Partners of America, a buyer and operator of single-family rental properties, for $6bn, a signal of confidence from the world’s largest real estate manager that the US housing market boom is here to stay. Reflects I think the expectation of inflation rising and real estate being a better asset than bonds.
GameStop +VE on news that the video game retailer had raised £1.13bn through the sale of 5m shares.
Korn Ferry +VE after reporting earnings per share of $1.21 for its fiscal fourth quarter, an all-time high and above the mean estimate of $0.98 expected by analysts polled by Refinitiv. It generated $555m in fee revenue during the same period, another “all-time record” it said, which represented a 26 per cent year-on-year rise
Banks JPMorgan Chase -0.1%, Citigroup +0.8% ,Wells Fargo +0.6%, Amex -0.3%
Work from home names: Facebook +2%, Apple +1.3%, Amazon +1.5%, Netflix +2.4%, Disney -0.3%, Zoom Video +1.5%, Alphabet +0.4% and Microsoft +1.1%,
Tech NXP Semi +0.5%, Nvidia +2.5%, Micron +0.8%, AMD +1.2%, Skyworks +0.2%
Re-opening stocks Boeing -0.6%, Caterpillar -0.04%, Simon Property -1%, Kohl’s +2.6%, Nordstrom +4.7%, Gap +2.2%, United Airlines -0.9%, Carnival -2.1%, Wynn Resorts -0.7%, Chevron +0.3%, Exxon Mobil +1.9%,
Lock down names Campbell Soup +0.1% General Mills +0.1%, JM Smucker -0.4%
Redbook 17.6% YoY vs 16.4% prior
Existing Home Sales May -0.9% MoM vs -2.7% Apr (F/cast was -1%)
Richmond Fed Manufacturing Jun 22 vs 18 May (F/cast was 16)
API Crude Oil Stock Change -7.199m vs -8.537m (Consensus was -3.625m)
NY Fed Treasury Purchases TIPS 1 - 7.5yrs vs 2.025B
USD was unchanged vs Yen & Euro. Bitcoin -0.57% @ 32,296.12, but dip below 30k during the day.
VIX -6.9% @ 16.66, US T10 @ 1.467% dipped after Powells Congress testimony.
OIL Brent -0.09%, WTI -0.79% but after market API showed stocks dropped more than expected; expect continued strength.
Gold -0.22%, Silver -0.73%, Copper +1.09% Platinum +1.95%, Palladium -0.13%.
MBA Mortgage Applications and 30 yr Mortgage Rate, Current Account, Manufacturing, Services and Composite Flash PMI’s, New Home Sales, EIA Oil Report.
NY Fed Treasury Purchases 4.5 - 7 yrs, 2 yr FRN Auction and 5yr Note Auction.
FED Speakers Bowman, Bostic and Rosengren speak
Earnings: IHS Markit, Winnebago, KB Home, Steelcase
DAX +0.21%, CAC +0.14%, FTSE +0.39%
Markets opened flat and trading sideways/slightly higher through the day with a tick up into the close. Investors try and work out Fed policy and watch for Powell’s testimony. Market opened with Auto +VE Chemicals -VE but at the end of the day Resources were the leaders.
UK +VE sentiment as it starats the progress of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Vivendi +0.3% got approval from investors Tuesday to spin-off of its iconic Universal Music Group.
Travis Perkins +6.7% in afternoon trading after forecasting strong profits on the back of robust building materials demand.
British property groups Land Securities +3.2% and British Land +4.7% after JPMorgan upgraded their shares to “overweight.” British Land also selling part of a London project
Dutch internet investment firm Prosus -3.2% after HSBC cut its price target.
Swiss online pharmacy Zur Rose Group - 5.2%.
Consumer Confidence Flash Jun -3.3 vs -5.1 May (F/cast was -3)
ECB’s Lane speaks
Public Sector New Borrowing May £-24.3B vs £-29.1B Apr revised (F/cast was £-28.4B)
CBI Industrial Trends Orders Jun 19 vs 17 May (F/cast was 25)
EUROZONE Flash PMI’s (Services, Manufacturing and Composite). ECB Non Monetary Policy Meeting
GERMANY Flash PMI’s (Services, Manufacturing and Composite)
FRANCE Flash PMI’s (Services, Manufacturing and Composite)
UK Flash PMI’s (Services, Manufacturing and Composite)
JAPAN Nikkei futures opened +30pts Chicago Futures +25pts; expect a muted open following Tuesday’s strong rebound and the pre market data. Tech remains +VE Softbank AGM today will be watched closely
Yen currently 110.64
Data due Pre market Jun Flash PMI
Services May was 46.5 F/cast is 47
Manufacturing May was 53 F/cast is 53.1
Composite May was 48.8 F/cast is 49
BoJ meeting notes
At lunch Coincident and Leading Economic Indexes
Tokyo reported 435 new covid cases (+199 DoD) with the nationwide total 1,437.
Tokyo Olympic organizers have given up on a plan to allow the sale of alcoholic beverages at competition venues during the global sports event, an official with knowledge of the matter said late Tuesday. -VE Brewers
Toshiba Corp; Hiromichi Mizuno, until recently an adviser to the Ministry of Economy, Trade and Industry said he did not put pressure on Harvard University’s endowment fund to influence its voting at Toshiba’s contested shareholder meeting last year, and that the fund should “set the record straight”.
Nissan Motor will adjust production at several factories next month due to the global chip shortage, three sources with direct knowledge of the plan told Reuters on Tuesday. Slight -VE But at the AGM the CEO said financial performance in April and May was better than expected Slight +VE Management faced a number of questions about Ghosn at the meeting .
Mitsui & Co said on Tuesday it had agreed to sell its stake in Indonesia's PT Paiton Energy, which operates coal power plants, to RH International (Singapore), a unit of Thai energy firm Ratch group PCL. +VE as will book a gain.
The head of a major inquiry into Japan's nuclear disaster and a former senior Cabinet adviser have sounded alarm over plans this week to restart a 44-year old reactor, saying the industry and government have not taken on board the lessons from Fukushima. -VE for sentiment
Japanese police on Tuesday filed a notice of investigation against the local office of food delivery service Uber Eats for suspected breach of immigration law. -VE
The Bank of Japan must make its inflation target more flexible so it can take into account not just price growth but also the output gap and job creation when deciding on monetary policy, an academic close to BOJ Governor Haruhiko Kuroda said.
Nvidia Corp. has an unlikely message for some of its most voracious customers: Please don’t buy our latest high-end computer-graphics chip. The GeForce RTX 3080 Ti, a $1,199 graphics card, and the RTX 3070 Ti, which costs about half that amount, have had some of their capabilities deliberately stripped out. Nvidia wants them to be the exclusive preserve of its core gamer customer base and is nixing the products’ ability to effectively mine cryptocurrencies like Ethereum and Bitcoin +VE
Cybozu (4776): Cuts full-year operating profit forecast 68% to 329m yen -VE
IHI (7013): Sign pacts with GE to develop ammonia fuels roadmapacross Asia +VE
Kansai Electric (9503): Mihama No. 3 nuclear reactor to restart Wednesday +VE
Kawasaki Kisen (9107): Raises full-year current profit forecast to 200b yen from 45b yen +VE
Mabuchi Motor (6592): To Acquire Electromag in All-Cash Deal; No Terms
Nitori (9843): June same-store sales -20.5% y/y
Nomura Holdings (8604): To book pretax gain of 36b yen for 1Q on NRI share sale
Nippon Telegraph & Telephone (9432): Dimension Data Co-Founder Jeremy Ord Steps Down: TechCentral
Tsuruha (3391): 4Q operating profit 8.7b yen vs analyst estimate 10.4b yen; forecasts OP of 51.2b yen for current fiscal year vsestimate 53.1b yen
SOUTH KOREA Expect markets to open higher following the rebound in Tech in the US
No data due
KDCA reported 395 new covid cases (+38 DoD) below 400 for a second day.
Samsung Electronics on Tuesday unveiled a set of innovative 5G solutions, three chips and one antenna radio, at its first virtual showcase event. +VE
South Korean property developer Sung Jung Co. said Tuesday the court has selected it as the final bidder to acquire financially troubled budget carrier Eastar Jet Co.
Coupang faces biggest backlash yet as criticism mounts over working conditions as the death of restaurant owner after dealing with Coupang Eats customer marks latest controversy surrounding the company. Comes as it is facing a wave of consumer boycotts over its handling of a fire that killed one person and destroyed its biggest logistics centre. -VE
Daewoo Shipbuilding & Marine Engineering Co. (DSME) said Tuesday that it plans to set up a global research and development alliance to develop state-of-the-art shipbuilding technologies.
To sharpen its competitive edge in the construction of eco-friendly ships and smart ships amid their growing demand, DSME will establish the R&D alliance, along with four universities, five ship quality assurance and risk management companies, and five research institutes, the shipbuilder said +VE.
Subcontractors of financially troubled SsangYong Motor Co. will receive additional financial help as the automaker is in search of a new investor. The state-run Korea Credit Guarantee Fund will provide 25 billion won ($22 million) for SsangYong's subcontractors, raising such help to 75 billion won in total, according to the Ministry of Trade, Industry and Energy. Slight +VE
LG Electronics Inc. on Tuesday unveiled a digital X-ray detector (DXD) with artificial intelligence (AI) solutions as the South Korean tech giant eyes to expand its presence in the medical equipment field.
Hyundai Motor Co. on Tuesday unveiled the Avante N high-performance model as it strives to strengthen its high-end product lineup.
TAIWAN Expect market to open slightly higher. More heavy rain +VE for sentiment in alleviating water shortages.
Data due after market
Unemployment May (Apr was 3.71% F/cast is 3.7%)
Industrial Production May (Apr was 13.62% YoY F/cast is 10%)
Retail Sales May (Apr was 18.27% YoY F/cast is 21%)
After market Tuesday
Consumer Confidence May 74.88 vs 77.28 Apr
CECC reported 79 new covid cases (of which 1 was imported)
The Ministry of Economic Affairs yesterday announced that it was easing water restrictions in several regions, thanks to rainfall over the past few days. The water supply alert level has been downgraded from “orange” to “yellow” for Taoyuan and Hsinchu and Miaoli counties, and from “orange” to “green” for Tainan and Chiayi County, the ministry said.
Taiwan’s representative office in Hong Kong would continue to operate even though most Taiwanese posted at the office have been forced home due to visa issues, Mainland Affairs Council (MAC) Minister Chiu Tai-san said on Monday. Comes as academics yesterday criticized China after staff at Taiwan’s representative office in Hong Hong were required to sign a document supporting Beijing’s “one China” principle. +VE
TSMC plans to give capacity priorities to auto chips and Apple orders, followed by orders for PC, server and networking equipment chips, Chinese media citing semiconductor sector insiders.
CHINA Expect market to open higher following the US but sentiment weak on credit and debt issues
No data due
China plans to keep pandemic border restrictions in place for at least another year amid fears over the emergence of new variants and a calendar of sensitive events, the Wall Street Journal reported on Tuesday, citing people familiar with the matter. The provisional timeline for the second half of 2022 was set during a meeting of China's cabinet, or State Council, in mid-May, the WSJ said -VE
FT Reports ‘Covid outbreak at Shenzhen port worsens supply chain delays’ Says prodcutivity has only recovered to about 70 per cent of normal levels -VE.
Chinese Foreign Minister Wang Yi will chair a high-level meeting on Belt and Road international cooperation in Asia-Pacific today (23 June), according to MoFA Spokesperson Zhao Lijian. Foreign ministers or economic ministers from Asia-Pacific regions, and representatives of international bodies like the United Nations will attend the video conference. The meeting's theme will be strengthening anti-plague team-up and fostering economic recovery.
More than 40 countries urged China on Tuesday to allow the U.N. human rights chief immediate access to Xinjiang to look into reports that more than a million people have been unlawfully detained there, some subjected to torture or forced labor, Reuters reports. -VE
China and its allies called on Tuesday for an investigation into the discovery of the remains of indigenous children in Canada at the site of a former boarding school, prompting an angry response from PM Trudeau; condemning what he called "the systemic abuse and human rights violations" in Xinjiang, said a Canadian truth and reconciliation commission had worked from 2008 to 2015 to address the mistreatment of the indigenous population. "Where is China's truth and reconciliation commission? Where is their truth? Where is the openness that Canada has always shown and the responsibility that Canada has taken for the terrible mistakes of the past?" Trudeau asked. -VE for sentiment and another example of how the ‘wolf warrior’ diplomacy is not working for China.
Germany needs an honest discussion about how to deal with trading partners such as China and must not duck confrontation if red lines on human rights are crossed, the head of the influential BDI industry association said on Tuesday. -VE
Huawei 5G ban is upheld by Swedish court -VE for its European plans
HONG KONG ADR’s +82pts at 28,391 with Financials weak, expect Petrochems to be strong after the US API report. Expect some initial margin call selling. Evergrande in focus over its financial state.
No data due but after market Tuesday
Inflation Rate May +1% YoY vs +0.8% Apr (F/cast +1%)
Current Account Q1 HK$59.8b vs 31.2B Q4 (F/cast was 30b)
Short Selling Tuesday 15.1 vs 15.8% Monday
Top Shorts Bank of China (3988) 39%, Bud APAC (1876) 39%, CLP(2) 36%, Hang Seng Bank (11) 33%, Country Garden (2007) 33%, Hengan (1044) 32%, Sands China (1928) 32%, Anta (2020) 32%, Power Assets (6) 32%, HKEX (388) 31%, Geely Auto (175) 30%, Longfor (960) 29%, MTRC (66) 29%, CKAsset (1113) 28%, Ping An (2318) 28%, Henderson Land (12) 27%, CKI (1038) 25%, Petrochina (857) 25%, Xinyi Solar (968) 25
Foxconn offers workers record-high cash bonuses, especially experienced ones, to sign on as it ramps up its production capacity ahead of Apple’s iPhone 13 launch +VE,
PHOENIX TV (02008.HK) announced that with effect from 22 June 2021, LIU Changle has tendered his resignation as the Chairman and an executive Director. XU Wei, the chief executive officer of the Company, has been appointed as the Chairman and an executive Director. HO Chiu King, Pansy Catilina has been appointed as the Vice-chairman of the Board and a non-executive Director.
Fitch Ratings announced to downgrade the long-term foreign notes IDR of EVERGRANDE (03333.HK) and its subsidiaries including Hengda Real Estate Group Co., Ltd and Tianji Holding Limited from "B+" to "B". Fitch Ratings projected a negative prospect for EVERGRANDE as the company continues to be pressurized and is forced to reduce its business scale and reduce debts, which might impose a negative influence on the company's business in mid-terms. -VE
YUEXIU SERVICES (06626.HK) has decided to price its Hong Kong IPO at $4.88 per share, which is the bottom price within the $4.88-$6.52 range of its listing price, reported IFR, citing sources.
YUEXIU SERVICES's IPO offers over 369 million shares, if priced at the lower limit, it is estimated to raise approximately $1.804 billion. Slight -VE
SINO-OCEAN GP (03377.HK) announced that the Group had signed a strategic cooperation agreement between a bank and an enterprise with PAB (000001.SZ). Accordingly, PAB will provide SINO-OCEAN GP with an intentional credit facility of RMB30 billion, customized financial service products and solutions, as well as both domestic and overseas financing support. +VE
AIA (01299.HK) announces that the China Banking and Insurance Regulatory Commission (CBIRC) has approved AIA China to begin preparations to establish a new branch in Hubei province. Lee Yuan Siong, AIA Group Chief Executive and President, said the group is delighted to receive approval to prepare for its branch in Hubei. This is an important next step in the group's geographical expansion strategy in Mainland China, following the recent launch of its newest operation in Sichuan province in April. +VE
First trial under the new law starts today, without jury; will be watched closely to see whether the National Security Law surpasses the Basic Law.
The Chief Executive Carrie Lam Cheng Yuet-ngor hit back on Tuesday against criticism of actions against pro-democracy tabloid Apple Daily as attempts to "beautify" acts that endangered national security, "And don't try to accuse the Hong Kong authorities for using the national security law as a tool to suppress the media or to stifle the freedom of expression," she added. -VE for sentiment.